Four banks will see their practices put under the spotlight for the complex financial instruments initially; Barclays, HSBC, Lloyds and the Royal Bank of Scotland. These banks have already agreed to work on reviewing individual sales and providing redress to customers based on principles outlined by the FSA.

The FSA looked at 173 sales to non-sophisticated customers and found that more than 90% of the sales did not comply with at least one or more regulatory requirement. Many of the 173 cases are likely to result in money being returned to the customer.

Barclays has also been embroiled in the London inter bank offer rate (Libor) scandal - it has already paid £290m in fines last summer for manipulating the interbank borrowing rate.

New chief executive Anthony Jenkins is on a mission to bring credibility and trustworthiness back to the bank after a torrid 12 months.

In January, Barclays' staff were told to sign up to an ethical code of conduct or quit, in the bank's bid to repair its battered reputation.

He said: "We must never again be in a position of rewarding people for making the bank money in a way which is unethical or inconsistent with our values."

The banks' new code of conduct will centre on five values - respect, integrity, service, excellence and stewardship.

Data from the financial ombudsman showed almost half of the PPI complaints brought to it appeared in the past three months.

In total, the ombudsman received 180,679 new complaints between October and December 2012, 145,546 of which were new PPI complaints.

The total number of PPI complaints for the financial year to 244,873. This equates to 8,000-10,000 new PPI complaints each week. The ombudsmand estimates it will receive more than 350,000 PPI complaints this year.